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A Star PhilosopherWith the announcement that the Canadian philosopher Charles Taylor will be soon be honored for his investigations in human spirituality, another star has been added to the firmament of Templeton Prize winners. Taylor is an exceptional philosopher, a practicing Catholic much influenced by the Second Vatican Council, yet unallied with any school of thought or intellectual fashion. His Sources of the Self (1989), a study of the emergence of modern consciousness, is a model of philosophical reasoning, appreciatively sorting through the history of ideas to identify what ideas were mistaken and what worth preserving.

In an opinion piece for Forbes magazine on March 14, Taylor wrote that faced with reductive thinking in social science and popular commentary, we need to understand people’s spiritual yearnings so as to be able to channel public energy away from violence. We urgently need a disciplined exploration of these spiritual dimensions to human motivation, he wrote. They can so easily turn bad.... But they can also be turned around and become the most effective antidote to violence. Citing Desmond Tutu, Martin Luther King Jr. and Ghaffar Khan, a Muslim who, like Gandhi, led a nonviolent campaign against British colonial rule in India, Taylor argued for the transformative power of religion in political conflict. With radical Islam sweeping the Middle East and creeping Islamophobia infecting the West, he contends that religious leaders who can think out of the box can bring both their people and the rest of us out of the trap of believing our common future will inevitably be a violent clash of civilizations.Tipping PointWestern nations have reached the tipping point in developing serious policies to halt global warming, with momentum picking up for legal regulation of carbon emissions. Resistance to government-imposed limits on carbon dioxide pollution in the name of economic efficiency is collapsing. The European Union recently proposed to cut emissions from its 27 countries by 20 percent by 2020 and by 30 percent with a new global agreement. In the United Kingdom, the government of Tony Blair will introduce a bill to set five-year carbon budgets aimed at cutting pollution by 60 percent by the year 2050. In Canada, British Columbia’s provincial government has announced it aims to cut carbon emissions by one-third by the year 2020. In addition, B.C.’s premier, Gordon Campbell, has announced a Pacific Coast compact with California’s Gov. Arnold Schwarzenegger, who has already set reduction targets of 11 percent by 2010, 25 percent by 2020 and 80 percent by 2050. The B.C. government also announced its Climate Action Team will propose policies to make the government carbon neutral (that is, stopping net increases in atmospheric carbon dioxide) in just four years. Both policymakers and business leaders now recognize that regulation need not be a hindrance to long-term profitability. Regulation, as has already been shown with green-building standards, can also reshape markets, stimulate innovation and encourage more responsible behavior both by individuals and corporations.Faithful FundsThe rationale behind socially responsible investing is simple: If you are going to invest your hard-earned money, you might as well put it to work through investments that promote what you believe in (the arts, alternative energy, health care) or at least those that avoid what you think is wrong. A growing number of mutual funds cater to the socially responsible investor, often individuals or groups with strong religious affiliations. Such funds tend to use the latter method, applying a filter or screen that eliminates companies they think their investors would wish to avoid. The prohibition list varies by fund: no alcohol or pork products for Muslim funds; no alcohol, firearms, weapons or gambling for Presbyterian funds; no abortion (or abortifacients) for Catholic funds.

Conventional wisdom warns investors to limit their allocation in socially responsible funds to just 10 percent of their total investment portfolio. Common sense advises potential investors to ignore the pious ring of any fund name. Economic sense advises investors to find out the fee scale and the rate of return. The screen, though, is key. It seems only prudent to ask what filter is being applied by a given mutual fund, and how. A mutual fund screen, for instance, that to avoid investments in pornography eliminates every hotel chain that offers adult movies, would whack, The Wall Street Journal suggests, 400 companies from the Russell 3000 stock index, which means lopping off a sizeable chunk of its potential investment pool.

Investors should also consider complexity: a company that produces contraceptives may also produce an assortment of life-saving vaccines or medicines. And finally, investors should assess the mutual fund’s own corporate behavior, such as its employee wages and benefits. It would be the height of irony to invest in a firm that quietly stiffed its own staff while trumpeting its ability to manage money according to religious values.